Latin America and Caribbean Pricing Q4 2022

Casualty pricing increases for third consecutive quarter

Insurance pricing in the fourth quarter in the Latin America and Caribbean (LAC) region increased 7%, compared to 5% in each of the prior two quarters.

Property insurance pricing increased 6%, compared to 5% in the previous quarter; it was the seventeenth consecutive quarter of increase.

• Pricing increases up to 10% continued across the region when facultative capacity was required, with the highest rise in catastrophe (CAT) exposed areas.
• Property CAT is a concern across the region.
  • Insurers exhibited strict underwriting discipline and asked for more and better information.
• Reductions in capacity in Brazil continued, with select industries and complex risks putting upward pressure on pricing.
• Strike, riot, and civil commotion (SRCC) and sabotage and terrorism (S&T) continued to be challenging due to the region’s political uncertainty.

Casualty insurance pricing increased 8%, compared to 6% in the prior quarter.

• Pricing increased across the region, particularly in Brazil, Colombia, and Chile.
• Larger organizations generally experienced higher increases and limited capacity compared to smaller ones.
• Insurers were selective in deploying capacity for product liability exposures in the US and Canada, as well as for energy, chemicals, fertilizers, and other high-risk exposures.

Financial and professional lines pricing rose 8%, compared to 6% in the prior quarter, marking the third consecutive quarter of single-digit increases.

• D&O and FIs saw new capacity enter the market, as well as an openness by insurers to reviewing exposed risks, competitive rates, and increased appetite.
• Insurers generally looked to grow their professional indemnity business, and typically were open to reviewing risks and offering competitive terms and conditions.
  • For single project professional indemnity (SPPI), insurers continued to demonstrate a conservative approach.

Cyber insurance pricing increased 33% in the fourth quarter, a lower rate of increase than had been seen for several quarters.

• Competitive terms and moderating rate increases signaled a greater willingness from insurers to underwrite cyber coverage.
• Industries that faced significant rate increases included financial institutions, manufacturing, and technology.